CMS Delays Stage 3 of Meaningful Use; Medicare EHR Penalties Remain for 2015

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By Alex Ruoff  

Dec. 6 --The Centers for Medicare & Medicaid Services will delay for one year the third and final phase of its multibillion-dollar electronic health record incentive program, the agency announced Dec. 6.

The CMS has postponed the start of Stage 3 of the meaningful use program from 2016 to 2017. The reporting timeline for Stage 2 of the program has also been extended, from 2016 to 2017, giving hospitals and eligible professionals an extra year to meet meaningful use criteria. Stage 2 began Oct. 1 for hospitals and will begin Jan. 1, 2014, for eligible professionals.

Hospitals and health-care providers who have received incentive payments for at least two years under Stage 1 of the meaningful use program will be required to move into Stage 2 in 2014. However, the delay will provide them an additional year of reporting under Stage 2 before they must move on to Stage 3, the CMS said.

The meaningful use program launched in 2011 and is being phased in over three stages. Stage 3 of the program is expected to be the most rigorous in requiring hospitals and clinicians to use EHRs in their practices. Medicare-participating providers and hospitals must meet meaningful use program requirements before 2016.

The delay won't affect the 2016 Medicare payment penalties scheduled for health-care providers and hospitals who don't meet meaningful use requirements, CMS spokeswoman Rachel M. Maisler told Bloomberg BNA Dec. 6.

Eligible professionals and hospitals that don't meet meaningful use program requirements by 2015 will face a 1 percent Medicare reimbursement cut starting in 2016. That penalty is a congressionally mandated part of the program and increases by 1 percent each subsequent year, until 2018, that a health-care provider or hospital fails to meet meaningful use program criteria.

The CMS extended stages 2 and 3 of the meaningful use program to ensure the successful implementation of Stage 2, Rob Tagalicod, director of the CMS Office of eHealth Standards and Services, and Jacob Reider, the acting National Coordinator for Health Information Technology, said in a joint blog post Dec. 6.

They said the delay was in response to concerns from health-care providers and hospitals participating in the program, who asked for more time to implement the technology upgrades and clinical workflow requirements of Stage 3.

“The phased approach to program participation helps providers move from creating information in Stage 1, to exchanging health information in Stage 2, to focusing on improved outcomes in Stage 3,” Tagalicod and Reider said. “This approach has allowed us to support an aggressive yet smart transition for providers.”

Delays Help Implementation

During the extended Stage 2 reporting period the CMS and the ONC will study participant data and develop requirements for Stage 3, Tagalicod and Reider said.

Two health IT industry associations, the College of Healthcare Information Management Executives (CHIME) and the Healthcare Information Management and Systems Society (HIMSS), applauded the delay. CHIME also asked the CMS to consider further delaying the Stage 2 reporting period for early entrants to the meaningful use program.

“This is a tremendously positive step,” Russell P. Branzell, president and chief executive officer of CHIME, said in a statement. “With additional time to develop Stage 3 requirements, providers can optimize their EHRs and workflows; vendors can develop new functionalities and improve usability; and policymakers can produce more informed recommendations.”

Thomas Leary, vice president for government relations at HIMSS, said in a statement that the extension “offers an opportunity for increased feedback and analysis on technology implementation, eClinical Quality Measure reporting, and progress toward interoperability that will enhance the ability of eligible hospitals and eligible professionals to meaningfully use health IT, and thus improve the quality and cost-effectiveness of patient care.”

Several health-care industry associations and more than a dozen Republican lawmakers asked for delays to Stage 2 of the meaningful use program this year. Most notably, the Senate Finance Committee held a series of hearings in July with industry executives and ONC officials to discuss such a delay .

As of October, the meaningful use program had paid nearly $17 billion in Medicare and Medicaid incentive payments to providers and hospitals that adopted EHR systems since the program launched in 2011, according to CMS data.

The CMS said it will release proposed rulemaking for Stage 3 of the meaningful use program in fall 2014. The final rule for Stage 3 will be released in the first half of 2015, the CMS said.

EHR Certifications

The Office of the National Coordinator for Health IT also announced Dec. 6 it will update its electronic health record certification criteria more often.

Reider said during a press call that the agency wants its EHR certification program, which approves EHRs for use in the meaningful use program, to adapt more quickly to evolving industry standards.

ONC will publish new certification criteria roughly every 12 months, starting with 2015 edition certification, Reider said.

However, participants in the meaningful use program won't have to use 2015 edition certification and can continue to use 2014 edition certification. Eligible professionals and hospitals in the meaningful use program must use EHR products certified through the ONC program to qualify for incentive payments.

“We expect to propose that the 2015 Edition would be voluntary in the sense that providers participating in the EHR Incentive programs would not have to upgrade to 2015 edition EHR technology and no EHR technology developer who has certified its EHR technology to the 2014 Edition would need to recertify its products,” Reider said in the blog post. “Our intention would be for the 2014 Edition to remain the baseline certification criteria edition for meeting the Certified EHR Technology definition.”

Reider said the extended deadlines won't stymie the progress of the meaningful use program, which the Department of Health and Human Services said earlier this year was responsible for more than doubling the percentage of health-care providers and hospitals using EHRs over the past two years. Rather, Reider said, the extensions will allow the CMS and the ONC to respond to industry demands and health IT trends.

“We're keeping the pedal to the metal, so to say, yet we're recognizing that it's going to take additional time in order to prepare for Stage 3,” Reider said. “The only way for us to do that is for us to build a clear understanding of what is successful and what is not successful in Stage 2.”

The new reporting requirements will “spread out over a longer time period for which EHR developers have previously had to react,” he said.

“One of the challenges we have had is that health IT developers haven't had sufficient heads-up about what is it that ONC expects to have in future certifications,” Reider said. “[W]e're telegraphing our paths regarding future certification criteria and we're doing our very best to provide earlier certification regulations for vendors to react to and then work toward development.”

To contact the reporter on this story: Alex Ruoff in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at

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